U.S. manufacturing productivity increases in first quarter

May 4, 2012

The U.S. Bureau of Labor Statistics (BLS) released a report on May 2 that highlighted how productivity in the manufacturing sector jumped 5.9 percent in the first quarter. This rise represented an increase from the previous quarter's slower pace and affirmed many opinions that American industry is in the midst of a renaissance.

Shopfloor reported that the BLS data showed manufacturing was a bright spot in terms of all sectors in the U.S., as many other industries were not supported by gains or increases in productivity during the first quarter.

According to the report, the output in the sector grew 10.8 percent and the hours that employees worked increased 4.6 percent during the period. These gains were the largest reported in the sector since the second quarter of 2010, as U.S. manufacturing showed signs of a recovery from the recession.

The report noted that the past four quarters have seen an increase in productivity of 2.5 percent and these numbers were supported by a significant drop, 4.2 percent, in the unit labor costs in the sector.

According to Shopfloor, the manufacturing sector, compared to other industries, saw its labor productivity grow at a faster rate than the rest of the economy. The measure grew by 2.1 percent more than the rest of the nonfarm sector.

Durable and nondurable manufacturing productivity increased 3.7 percent and 2.1 percent, respectively. According to the news source, these numbers suggest that companies in the U.S. continue to experience a significant rise in output from their workers and this has put it ahead of the rest of the economy.

Manufacturing output grew 4.8 percent in 2011, and the figures for the first quarter of the year were similar to the high numbers for that period during 2012. Increases in this data, coupled with higher levels of confidence from U.S. manufacturers, could further support growth and expansion in the sector.

According to Shopfloor, this will allow manufacturers to further adjust their business strategy toward ramping up production, which will likely require them to increase hiring and bring on more qualified workers.

The New American reported that more efficient practices, and a lack of a drop-off in foreign demand for U.S.-manufactured goods is supporting the growth. Strategies like lean manufacturing can further enhance these gains.